Protect Yourself From Scammers Still Targeting Illinois Residents in Unemployment Benefits Fraud Schemes

Natalie Frank, Ph.D.

Tips on how to protect yourself from unemployment insurance fraud in Illinois.

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Many people in Illinois have received unemployment debit cards in the mail that they never applied for. Reports to major news outlets of massive identity threat in Illinois continue.

According to security experts, along with the overwhelming volume of legitimate claims during the pandemic and public pressure to speed up payments, mobile banking apps and prepaid debit cards issued by some state unemployment offices have paved the way for fraud this year. Illinois has prepared for low-level fraud for years, trying to determine whether residents filing for unemployment benefits were being truthful. However, they were unprepared for the recent wave of imposter fraud – including from overseas – which caught them completely off guard.

Due to the antiquated computer systems which failed to catch foreign IP addresses, repetitive computer serial numbers, and methods for hiding that number by the time Illinois caught on to the fraud, 212,000 Illinoisans had been defrauded by a county wide fraud scheme. The state’s computers finally started to note unusual activity such as accounts from out-of-state banks, duplicate email addresses, and multiple names using the same bank accounts. By then, millions had been lost to this scam.

One of those targeted was Representative Rodney Davis. Davis sent a tweet about his situation last week in order to increase awareness in Illinois that this is going on.

“Somebody applied for unemployment benefits in my name. That person was denied,” Davis said. “I was told I wasn’t going to receive any benefits, which is great. The worst-case scenario is to have somebody granted benefits in your name and then you don’t know where they went.”

He went on to say that many people are receiving unemployment benefits using debit cards that they never applied for. He believes that this will end up costing everyone money.

The Representative said that his office has gotten numerous calls from people who have received similar cards though they never applied for unemployment benefits. Like them, Davis has had trouble getting through to the Illinois Department of Employee Services.

He said he called one number and was directed to a different number. He called that one and left a message but didn’t hear back after several days.

“I called them at 9:30 (Tuesday) morning and got a message saying call another number,” he said.

Davis called that number and left a message on an automated system. He received a text back, saying he would get a return call. But two days later – nothing.

“It’s unacceptable to have a message system say they will call you back and I’m working on two days without a contact, not even a text as to when it would come through,” Davis said.

The majority of people victimized by this scam received assistance through the Pandemic Unemployment Assistance program (PUA). IDES explained one of the reasons for this.

“Under the ambiguous federal guidelines, which were developed in haste because of the urgency of the pandemic and issued to every state without a uniform method of implementation, the potential for fraud within this system is abundant.”

Another reason is that many who are eligible to receive benefits through PUA are freelancers or gig workers who could not receive traditional unemployment benefits due to the lack of a former employer on the other side of the claim. When there is an employer involved, they would be more likely to notice a fraudulent claim and to contest it. They would be able to inform IDES if a claim was filed for someone who was still working or lost the job due to something that could be construed as their fault.

IDES has stated that they are working aggressively to stop this scam from continuing and are cooperating with local and federal law enforcement “to investigate, pursue, and prosecute those who are defrauding the unemployment insurance system.”

The Illinois Department of Employment Security said this scam is not limited to Illinois, but is widespread, attacking each state’s federal pandemic unemployment assistance.

Now IDES has discovered scammers a new method to fraudulently file for unemployment benefits. They are using personally-identifying information (PII) which they took from a different source outside of the Department’s system. This may have been obtained from a former cyder attack or other means of identity theft.

Scammers have been filing for unemployment benefits using the PII of people and including a fake employer address in their application. This has become an aggressive scheme used by fraudsters looking to defraud the State’s unemployment systems.

An analysis found that fraudsters were applying for unemployment benefits using the PII of certain identity theft victims and including fake employer addresses in their applications. For example, a large fraud ring was found operating out of West Africa using PII stolen in previous data breaches such as the 2017 Equifax breach.

Often these scammers have used the PII of people who aren’t unemployed so that the victims aren’t likely to notice it right away. They have the money sent to prepaid debit cards from which they can have the money quickly transferred to associated bank accounts or exchanged for cryptocurrency.

How to Spot Unemployment Fraud

There are several circumstances that may occur that you can identify as red flags in regards to unemployment fraud.

  • You are sent a debit card or unemployment insurance letter regarding your unemployment insurance findings but you have not filed a claim
  • Your employer tells you that there has been a claim made in your name despite the fact that you are still employed
  • You try to submit an application for unemployment but find one already exists
  • You are sent a letter from the IRS about unreported unemployment insurance benefits
  • You receive a letter about a tax rebate though you haven’t applied for one

How You Can Protect Yourself From Unemployment Insurance Scams

  • Report the fraudulent claim here.
  • If you are employed, report the fraud to your HR department.
  • If you think someone has filed a claim in your name, don’t activate the debit card or contact KeyBank.
  • Request your free credit reports via www.annualcreditreport.com and review them for other fraudulent activities. It’s a good idea to do this regularly even if you don’t suspect fraud in this case to prevent other scams from harming your credit scores.
  • If you believe your identity has been stolen, someone likely has your social security number. Contact all three credit bureaus and freeze your credit reports. Anyone who tries to open an account in your name should be prevented. Just remember to unfreeze it if you want to apply for a loan or credit card.
  • Don’t respond to any calls, emails, or text messages about repaying money mistakenly sent to you. Do not wire money, send cash, or put money on gift cards. IDES will never ask you to repay money that way. If you do so, you may look like a money mule which can lead to further trouble.
  • Though money is usually deposited in an account belonging to the fraudster, sometimes it may be deposited in your account. The scammer then contacts you and claims that a mistake has been made asking you to return it. It you do so, you may have larger problems since it may look like you were part of the scam. If any money shows up in your account for unemployment benefits that you have not applied for, report it immediately.
  • After you file a report with IDES go to the Federal Trade Commission and take these immediate steps to prevent yourself from becoming the victim of other types of fraud.

If someone does succeed in filing a claim and taking money in your name, the money will be replaced so that it is still available to you should you file a claim. But it’s better to try to prevent this from happening in the first place. It can take weeks or months to restore the money to your account.

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Chicago, IL
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